Ad Industry Sets Seven Privacy Protection Principles

A coalition of advertising industry trade organizations on Thursday established a set of seven principles to protect consumers from the advertising practices of its members, specifically behavioral advertising. The principles, if followed, should also protect the advertising industry from government regulation and from consumer countermeasures like ad blocking technology.

The principles call for industry educational outreach, transparent data collection practices and disclosures, consumer control over collected data, reasonable security and limited data retention, obtaining consent when policies change, heightened protection for data regarding children, health, and finances, and advertiser accountability.

The American Association of Advertising Agencies (AAAA), the Association of National Advertisers (ANA), the Direct Marketing Association (DMA), and the Interactive Advertising Bureau (IAB) all praised the principles as a way to balance consumer concerns about misuse of personal information with the ad industry's need to use personal information to deliver relevant ads.

"Although consumers have registered few if any complaints about Internet privacy, surveys show they are concerned about their privacy," said IAB president and CEO Randall Rothenberg in a statement. "We are acting early and aggressively on their concerns, to reinforce their trust in this vital medium that contributes so significantly to the U.S. economy."

How significantly? A study commissioned by the IAB, "Economic Value of the Advertising-Supported Ecosystem," found that the ad-supported Internet represents 2.1% of the total U.S. GDP (about $300 billion) and has created 3.1 million U.S. jobs.

In citing such figures, the IAB's message to the federal government is something along the lines of "Take one more step toward regulating us and the economy gets it."

Various members of Congress and the Federal Trade Commission have been mulling regulation of behavioral advertising for years.

In testimony last month at a congressional hearing on behavioral advertising practices, Edward W. Felten, professor of computer science and public affairs at Princeton University, made it clear that worries about behavioral advertising practices extend beyond tinfoil hat-wearing privacy fanatics. "Citizens are rightly concerned about the possibility that commercial entities will build extensive profiles of who they are and what they do online," he said.

Behavioral advertising, which Google and other online ad organizations now refer to using the neutered term "interest-based advertising" and detractors refer to using the more sinister term "behavioral targeting," relies on data gathered from Internet users' online activities in conjunction with data supplied by Internet users to construct interest profiles. These profiles can then be used to deliver the ads most likely to generate a response.

Google, a longtime participant in discussions about potential behavioral advertising regulation, in March introduced a tool called the Ads Preferences Manager that allows users to out-out of behavioral advertising or to specify the preferred ad categories. Such options for consumer should become more common as online marketers work to integrate the new behavioral advertising principals into their operations.

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